Microsoft confirms exact match keywords override ad rank in search auctions, fundamentally changing how advertisers compete against Performance Max campaigns.

Navah Hopkins explains Microsoft Ads exact match priority in December 2025 auction mechanics video

Microsoft Advertising disclosed new details about its auction mechanics on December 18, 2025, clarifying that exact match keywords receive absolute priority over all other campaign types when competing for the same placement. The announcement came through multiple channels including LinkedIn and X, where Navah Hopkins, Microsoft Ads Liaison and Top 25 PPC Influencer, explained how the platform determines which advertisements serve across its network, including its AI-powered Copilot surfaces.

**"Exact match will get the priority if it’s there, otherwise Ad Rank determines everything," **according to Hopkins in a December 18 social media post. The clarification addresses advertiser confusion about how Search campaigns interact with Performance Max, Audience campaigns, and other automated campaign types when competing for identical placements across Microsoft’s advertising inventory.

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The priority system operates through a hierarchical decision framework. When a search query exactly matches a keyword in a Search campaign—including exact match keywords—that Search advertisement serves instead of any Performance Max advertisement, regardless of Ad Rank differences between the campaigns. Hopkins emphasized this point in an accompanying video posted to LinkedIn on December 18: "If you’re running a PMax and Search campaign they might also have overlap. An exact match keyword in a Search campaign will always win over PMax. Beyond that, it goes to Ad Rank."

For all other campaign type combinations, including Performance Max versus Audience campaigns, Microsoft Advertising relies on Ad Rank calculations to determine auction winners. The platform evaluates five primary factors when calculating Ad Rank: bid amount, ad performance metrics such as click-through rate, ad relevance to the search query, ad extensions available within the campaign, and competition from other advertisers participating in the same auction.

The implications extend beyond traditional search surfaces. According to Hopkins’ December 18 X post, exact match keywords can technically serve on Microsoft’s Copilot AI surfaces, though the practical likelihood remains extremely low. "We do not block exact match from causing an ad to serve in Copilot, it’s just that the odds of a conversation exactly matching the exact match keyword are very low," Hopkins explained in her LinkedIn post. The conversational nature of AI-powered search makes precise keyword matching unlikely, giving broad match and Performance Max campaigns higher probability of serving in those contexts.

Hopkins provided extensive detail about how advertisers should approach these auction dynamics in practice. The priority given to exact match keywords means Search campaigns retain control over their designated keyword territory even when Performance Max campaigns with superior Ad Rank scores compete for the same queries. This represents a significant departure from how Google Ads handles similar situations, where Performance Max historically received automatic priority over Standard Shopping campaigns until October 2024 changes shifted to Ad Rank-based determinations.

When Audience advertisements and Performance Max campaigns compete for the same display placement, the creative that serves—and the campaign representing the advertiser in the auction—depends entirely on Ad Rank calculations without any automatic priority assigned to either campaign type. According to Hopkins’ December 18 LinkedIn post: "If you’re running an Audience ad and PMax campaign it’s possible for them to be competing for the same display spots. The creative that serves (and campaign representing you in the auction) will be determined by Ad Rank."

The clarification comes as Microsoft Advertising has expanded Performance Max capabilities throughout 2024 and 2025. The platform reported Performance Max campaigns delivered 2.6 times more site visits and 4.2 times more conversionscompared to campaigns without Performance Max integration, according to October 2024 data. These results drove increased adoption among retail advertisers, creating the potential for more frequent overlap situations between Search and Performance Max campaigns.

Hopkins’ explanation directly addressed implementation strategies for advertisers managing multiple campaign types. She recommended three specific approaches for optimizing campaign performance given these auction mechanics:

First, advertisers should ensure their "control" campaigns have exclusive targeting parameters such as specific times, devices, locations, or audiences if serving in particular contexts matters strategically. Hopkins noted in her LinkedIn post that "PMax will not drive up the costs of your placements. It might jump ahead of the Search/Audience/Shopping campaign due to Ad Rank."

Second, bids and conversions serve as the primary communication mechanism between advertisers and Microsoft’s algorithms regarding campaign preferences. Hopkins explained: "If your Audience ad campaign is set to a low budget with low bids, odds are it will lose out to PMax for visual spots. If you’re building an Impression Based Remarketing audience, you may want to begin with more aggressive bids and budgets in the first 2-4 weeks of the campaign."

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Third, advertisers should investigate potential landing page issues that might negatively affect Ad Rank. Hopkins specifically recommended Microsoft Clarity, describing it as "a free behavior analytics platform designed to help you understand where your customers are getting stuck."

The auction mechanics disclosure provides clarity on a technical question that has implications for budget allocation across campaign types. Advertisers running both Search campaigns with exact match keywords and Performance Max campaigns targeting the same products or services now understand that the Search campaign will consistently capture queries matching their exact match keywords, while Performance Max handles broader intent signals and conversational queries that don’t precisely match keyword targeting.

Hopkins framed the auction dynamics within the context of AI-powered advertising evolution. "The AI era doesn’t mean abandoning the basics - Ad Rank still matters and leaning into AI campaign types like PMax doesn’t mean the rules suddenly change," according to her December 18 LinkedIn post. She emphasized that Performance Max has higher probability of serving on AI surfaces due to its flexibility in adapting to unique human conversations, but that standard Search or Shopping campaigns will serve when they achieve higher Ad Rank scores.

The specific auction behavior differs significantly from Google’s exact match implementation, where close variant matching has expanded to include semantically unrelated terms. Research from November 2025 showed Google’s exact match keywords triggering advertisements for search queries lacking core semantic elements of the original keywords, with "best hypoallergenic food for dogs" matching 13 search queries containing no hypoallergenic terminology.

Microsoft’s approach maintains stricter keyword matching requirements for exact match priority to apply. The platform requires the search query to "exactly match" the keyword, according to Hopkins’ December 18 posts. This precision requirement explains why exact match keywords rarely serve in Copilot conversations, where users express intent through natural language rather than keyword-like queries.

The transparency around auction mechanics comes as the advertising industry faces increasing scrutiny over auction transparency. The Media Rating Council released draft standards for digital advertising auction transparency in September 2025, establishing requirements across multiple channels including search advertising. Federal courts have also ordered Google to publicly disclose material changes to its ad auctions following findings that auction adjustments led to higher text ad prices that escaped advertiser notice.

Hopkins included links to Microsoft Advertising help documentation in her LinkedIn post, directing advertisers to official resources at help.ads.microsoft.com for detailed technical specifications. The documentation confirms that search campaigns with exact match keywords always take priority over Performance Max campaigns for matching queries, while all other campaign type combinations rely on the highest ad rank to determine which advertisement serves.

For advertisers managing Microsoft Advertising accounts, the clarification resolves uncertainty about campaign overlap scenarios. Search campaigns built around exact match keyword targeting can now be structured with confidence that they will capture their designated queries regardless of Performance Max campaign settings or Ad Rank differentials. This allows for strategic campaign architectures where Search campaigns handle known high-intent queries while Performance Max explores broader audiences and adapts to conversational search contexts.

The auction priority system applies across all Microsoft Advertising surfaces where Search, Shopping, Multimedia, and Performance Max campaigns can serve, according to Hopkins’ December 18 X post. These surfaces include traditional Bing search results, Microsoft Edge browser experiences, and the growing array of Copilot-powered AI interactions that Microsoft reported have doubled click-through rates compared to traditional search advertising placements.

Performance Max campaigns maintain their position as Microsoft’s premier AI-powered campaign type despite yielding to exact match keywords in auction priority. Recent platform updates introduced search term insights reporting, improved campaign import functionality from Google Ads via Search Ads 360, and AI-driven search themes that allow advertisers to provide contextual signals for faster campaign optimization.

The interaction between exact match priority and Ad Rank-based decisions creates a two-tier auction system. The first tier evaluates whether any Search campaign contains an exact match keyword for the query. If yes, that Search advertisement serves. If no exact match exists, the second tier activates where Ad Rank calculations determine auction winners across all eligible campaign types including Performance Max, Audience campaigns, Shopping campaigns, and Search campaigns with non-exact match keywords.

Hopkins’ explanation emphasized that this auction behavior represents continuity rather than change in Microsoft Advertising’s approach. The platform has consistently prioritized keyword targeting precision in Search campaigns while enabling AI-powered campaign types to handle broader scenarios. What changed on December 18 was transparency around these mechanics rather than the underlying auction logic itself.

Microsoft Advertising has invested heavily in Performance Max development throughout 2024 and 2025, expanding the campaign type’s capabilities with brand exclusions, campaign-level auto-generated asset settings, and enhanced reporting features. The platform reported that combining Performance Max with Search campaigns could lead to a 32% decrease in cost-per-acquisition and a threefold increase in return on ad spend on average, according to platform documentation.

The auction priority disclosure arrives as Microsoft’s search advertising business shows strong growth momentum. The company reported search and news advertising revenue increased 21% year-over-year to reach $13.9 billion for fiscal year 2025, according to financial documents released on July 30, 2025. Chief Financial Officer Amy Hood attributed the growth to "volume and revenue per search across Edge and Bing" during the earnings call.

For advertising professionals managing campaigns across both Google and Microsoft platforms, the exact match priority system represents a notable point of differentiation. While Google moved toward Ad Rank-based decisions between Performance Max and Standard Shopping in October 2024, Microsoft maintains automatic priority for exact match keywords regardless of Ad Rank differentials between campaign types.

The technical implementation details matter for campaign optimization strategies. Advertisers who previously avoided building Search campaigns with exact match keywords due to concerns about cannibalizing Performance Max performance can now structure campaigns knowing the Search campaign will consistently serve for its designated queries. This eliminates one source of auction uncertainty and allows for more precise performance attribution between campaign types.

Hopkins’ communication style throughout the December 18 posts emphasized practical application over technical jargon. She provided concrete examples of scenarios where advertisers might encounter campaign overlap, explained the decision logic Microsoft Advertising applies, and offered specific recommendations for optimizing campaign structures given these mechanics.

The reference to Microsoft Clarity in Hopkins’ optimization recommendations highlights the connection between Ad Rank and user experience factors. While bid amount represents the most direct lever for influencing Ad Rank, the platform’s consideration of ad performance, relevance, and extensions creates opportunities for improving Ad Rank through creative quality and landing page optimization rather than purely through bid increases.

Microsoft’s auction mechanics documentation, referenced in Hopkins’ LinkedIn post, confirms that Ad Rank calculation methodology mirrors industry-standard approaches used across major advertising platforms. The bid amount establishes a baseline, while quality factors including click-through rate history, ad relevance to the search query, and ad format enhancements through extensions modulate the final Ad Rank score. Competition from other advertisers affects minimum Ad Rank thresholds required for ad serving but doesn’t directly change individual advertiser Ad Rank calculations.

The Copilot integration details reveal an important nuance in how exact match priority applies across different search contexts. Traditional search query matching against keyword lists works straightforwardly when users submit keyword-like queries. Conversational AI interactions, however, rarely produce the precise phrasing required for exact match keyword triggering. This technical reality means Performance Max campaigns naturally dominate Copilot placements not through auction priority but through better matching probability given conversational query patterns.

Hopkins’ emphasis on "the AI era doesn’t mean abandoning the basics" reflects broader industry discussions about balancing automation with advertiser control. As platforms integrate more artificial intelligence into campaign optimization, auction dynamics, and creative generation, the persistence of rules-based targeting like exact match keyword priority provides advertisers with mechanisms for maintaining strategic control over specific high-value queries.

The December 18 disclosure generated engagement across industry social media channels, with advertising professionals sharing the posts and discussing implementation implications. The transparency around auction mechanics addresses a category of questions that advertisers frequently encounter when evaluating campaign architecture decisions and diagnosing unexpected performance patterns.

Microsoft Advertising’s approach to campaign overlap differs from its handling of website exclusion controls, where the platform provides hierarchical management across manager accounts, individual accounts, and campaign levels. The auction priority system operates automatically based on query matching and Ad Rank calculations rather than through advertiser-configured exclusion lists.

For advertisers transitioning campaigns from Google Ads to Microsoft Advertising through Search Ads 360 integration, the exact match priority system represents a key platform difference requiring campaign architecture adjustments. While both platforms use Ad Rank calculations for most auction scenarios, Microsoft’s absolute priority for exact match keywords creates opportunities for more deterministic control over high-intent query handling.

The disclosure timing in mid-December coincides with final campaign optimizations before the transition into 2026 planning cycles. Advertisers reviewing performance data and setting campaign structures for the new year now have clear guidance on how to architect Search and Performance Max campaigns to optimize for their specific business objectives while understanding auction behavior across both campaign types.

Hopkins concluded her LinkedIn post with practical implementation guidance: "What you can do with this information: 1. Ensure your ‘control’ campaigns have times/devices/locations/people that are exclusive to them if it matters they serve. PMax will not drive up the costs of your placements. It might jump ahead of the Search/Audience/Shopping campaign due to Ad Rank. 2. Bids and conversions are how you communicate your preferences. 3. Use Microsoft Clarity to investigate landing page issues that might get in the way of Ad Rank!"

The auction mechanics explanation provides foundational knowledge for advertisers making campaign structure decisions. Whether to build separate Search campaigns with exact match keywords versus relying entirely on Performance Max automation now becomes a strategic choice with clear technical implications rather than a decision made under uncertainty about how the platform would handle overlapping targeting.

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Timeline

• December 18, 2025 - Navah Hopkins posts auction mechanics explanation on X and LinkedIn clarifying exact match keyword priority over Performance Max campaigns
• October 2024 - Microsoft Advertising reports Performance Max campaigns deliver 4.2x more conversions with Copilot integration
• October 2024 - Google eliminates automatic Performance Max priority over Standard Shopping, shifting to Ad Rank-based auction decisions
• September 2024 - Microsoft enhances Performance Max with search term insights reporting and AI-driven themes
• August 2024 - Search Ads 360 integrates Microsoft automated bidding for cross-platform optimization
• July 2025 - Microsoft search advertising revenue climbs 21% to $13.9 billion driven by Copilot AI integration
• July 2024 - Microsoft details how Performance Max campaigns achieve optimal Copilot compatibility through algorithmic flexibility
• November 2025 - Google exact match degradation expands to semantically unrelated terms

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Summary

Who: Navah Hopkins, Microsoft Ads Liaison and Top 25 PPC Influencer, disclosed new details about Microsoft Advertising’s auction mechanics affecting Search campaigns, Performance Max campaigns, and Audience campaigns across the platform’s advertising network.

What: Microsoft Advertising confirmed that exact match keywords in Search campaigns receive absolute priority over Performance Max campaigns when competing for identical placements, regardless of Ad Rank differences. For all other campaign combinations, Ad Rank calculations determine auction winners based on bid amount, ad performance, relevance, extensions, and competition.

When: The clarification was announced on December 18, 2025, through social media posts on LinkedIn and X, with accompanying video explanation and links to official Microsoft Advertising help documentation.

Where: The auction priority system applies across all Microsoft Advertising surfaces including Bing search results, Microsoft Edge browser experiences, and Copilot AI-powered interactions, though exact match keyword serving probability remains extremely low in conversational Copilot contexts.

Why: The disclosure addresses advertiser confusion about how Search campaigns interact with Performance Max and other automated campaign types when competing for the same placements, providing clarity for campaign architecture decisions and performance optimization strategies.